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2023 (12) TMI 624 - ITAT PUNENetting of interest income - Interest Income earned from the Investment made in the sister concern - real income concept - Earning of interest income out of borrowed funds - nexus as established between Interest paid and Interest earned - assessee that assessee follows ‘Project Completion Method’ for recognition of revenue and has not recognized any revenue for taxation during the year - HELD THAT:- As in the present case the question is not whether the Interest Income is to be taxed Under the Head Income from Other Sources or Income from Business and Profession - The fundamental question is of netting off. In the earlier paragraphs we have elaborately discussed and observed that the Interest Earned by the assessee has direct nexus to the Interest paid by the assessee. Once this fact is established that the Interest earned have Direct Nexus to Interest Paid, then applying the concept of Real Income and applying the proposition of law laid down by Hon’ble Delhi High Court Triumph Reality Pvt. Ltd. [2022 (4) TMI 1233 - DELHI HIGH COURT] we agree with the assessee that Only Net Interest shall be capitalised. Therefore, we direct the AO to delete the addition - grounds of appeal raised by the assessee are allowed.
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